Local transfer pricing documentation for 2022 - the deadline getting closer

Local TPR documentation to be prepared by 31 October 2023

Taxpayers whose tax year coincides with the calendar year shall prepare local transfer pricing documentation until 31 October 2023, i.e. until the end of the 10th month after the end of the tax year.

It is worth noting that this deadline applies to the preparation of transfer pricing documentation. Its submission, however, takes place at the request of the tax authorities.

We would also like to remind of the remaining changes to the transfer pricing deadlines for taxpayers whose tax year coincides with the calendar year:

• 30 November 2023 - the deadline for submitting transfer pricing information on a TPR form (i.e. by the end of the 11th month after the end of the tax year),
• 31 December 2023 - the deadline for attaching group transfer pricing documentation to local transfer pricing documentation (i.e. by the end of the 12th month after the end of the tax year).

The TPR form must now be submitted to the relevant tax office, instead of to the Head of the National Tax Administration (KAS) as before.

Statement and TPR-C/TPR-P form in one document

For taxpayers who are subject to the transfer pricing reporting obligation of the TPR for 2022, it is important to know that there has been a change in the way the statement of preparation of documentation is submitted. Namely, starting this year, the statement that the documentation has been prepared in accordance with the actual state of affairs and the confirmation that the prices used in transactions with related parties are arm's length has been included in the TPR form.

The statement and the TPR-C/TPR-P form constitute one document. Therefore, when reporting related party transactions for 2022, there is no obligation to prepare and submit a separate statement in this respect, as was the case in previous years.

It should be recalled that previously, in addition to the submission of the TPR form, it was also necessary to prepare and submit a statement that transfer pricing documentation had been prepared and that the prices used in related party transactions were arm's length.

Learn more about the change in TPR regulations: Transfer prices 2023 – key changes

A new way of signing the TPR form

At present, the transfer pricing information must be signed by the head of the entity or a professional proxy. If the entity is headed by a multi-member body, the signature can be provided by a designated person who is part of that body.

In previous years, it was permissible for a TPR form to be signed and filed by a proxy, and that proxy could basically be any natural person. Often, therefore, the signature was provided by a designated employee or, for example, the company's accountant.

Following the change in the regulations, the TPR-C/TPR-P form can only be signed by a proxy who is a tax adviser, lawyer, solicitor or chartered accountant. The proxy must therefore act on the basis of an authorisation (UPL-1) to sign and submit returns.

Fines for failure to comply with TPR reporting obligations

Sanctions for failure to prepare transfer pricing documentation can be severe. A taxpayer who fails to prepare local transfer pricing documentation on time may face a sanction in the form of a fine of up to 240 daily rates, i.e. up to a maximum of PLN 11.52 million.

The provision of false information in the TPR form is also subject to sanctions. In such a case, the taxpayer commits a fiscal offence under the law. The penalty provided for a fiscal offence is a fine of up to 720 daily rates, or a maximum of PLN 34.56 million.

The same high fine can be imposed for failure to prepare local documentation at all. Therefore, it is worth getting ready in advance to comply with transfer pricing reporting obligations so as not to risk paying high fines.

Transfer pricing documentation - how can we help?

We help with transfer pricing documentation obligations. Our services offered include i.a.:

• preparing comprehensive transfer pricing documentation
• adapting the existing transfer pricing documentation to the Polish requirements
• providing advisory on the development and implementation of transfer pricing policy
• preparing and submitting the TPR form

Discover how we can help. Ask for an offer: Tax advisory - Transfer pricing